<DrumBeat: May 20, 2009 The Oil Drum Ecological Economics and the Food System>

49 comments on US Natural Gas - May 09

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Rune Likvern on May 20, 2009 - 2:21pm Permalink | Subthread | Parent | Comments top

Gail,
Thanks for an interesting piece.

Jon,

The diagram accompanying your comment is very comprehensive.
If I read it right, then assuming 750 rigs at work, US production may decline to about 56 Bcf/d by spring/summer 2011. US nat gas demand is presently showing some weakness and assuming some supplemental supplies of LNG (though the US nat gas prices presently suggests this will be the LNG market of last resort) and some time for an economic recovery to affect nat gas demand.

Further if Credit Suisse’s estimates are right about taking two years for increasing rig counts to claw back production levels, it looks like the period 2011 - 2013 might be supplied constrained.

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JonFreise on May 20, 2009 - 3:46pm Permalink | Subthread | Parent | Comments top

My prior comment was poorly worded. The time is 2 years from peak to peak for a simulated shale formation with 80% decline rates (like Haynesville).

credit_suisse_may09_two_year_recovery

The longer it takes for prices to rise back up to drilling costs the worse the drop in production will be and the more severe the price spike later.


Canadian NEB Short Term Deliverability Report

The NEB report has an appendix which lists the decline models and initial production by region. I thought others might like to see what a model might look like.

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Murray on May 20, 2009 - 4:24pm Permalink | Subthread | Parent | Comments top

I only saw this after my last post. It gives .020 Bcf/d/rig/yr, vs my estimated .016. Horizontal vs current mix could account for that difference. This scenario has 6 months down, 12 months flat, 3 months back up and then 3 months at the new plateau. We are now 8 months down. At $7.00/kcf to encourage drilling, (see Rockman) we are surely in for close to a year flat. then it is very unlikely that a ramp up could be done in anything near 3 months. Also a good percentage of the old vertical rigs will be scrapped and have to be replaced. Looks to me like at least 3 years to get back to Jan 2009, and maybe as much as 4. Murray

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49 comments on US Natural Gas - May 09

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